If the services canīe viewed as part of a separate business of the individual who provides the services, the individual may then be viewed as an independent contractor. This test presupposes that if the services provided by an individual are integral to the organization, then their involvement is one of employee. This test deals with the individual's degree of involvement in the organization. In other words, this test looks to whether the alleged employee is required to make their services available on an ongoing basis or whether servicesĪre made available to achieve a specified result. Is for personal services with no specific objective, the contract would resemble one for employment. If an individual is contracted to achieve a certain objective or result, then the service provided would indicate that the individual is an independent contractor. This test deals with the nature of the service provided. classroom, learning resource materials, audio-visual equipment, tools, etc.) in the course of the contract is also considered. On the other hand, where these elements do not exist, there is an inference of employment. To profit or possibility of loss and responsibility for costs, it is inferred that the taxpayer is an independent contractor. Where there is financial risk, opportunity If the individual has ultimate responsibility for the profit or loss of the contract, then this test would indicate a self-employed situation. This test deals with the economic practices of the individual. These factors preclude entering an independent contractor relationship. To co-ordinate all efforts toward the objective of education, according to the standards and policies established for the institution. In addition to this degree of control is the integration of the courses into the business of the University, and the requirement The University specifies the courses (and curriculum) to be taught, as well as the times and locations of these courses. A contract for services exists when a person is engaged to achieve aĭefined objective and is given all the freedom required to attain the desired result." In addition to this is the ability, where possible, of the contractor to control the place of work and the ability to delegate items to others. Revenue Canada's IT 525 states that: "A contract of service generally exists if the has the right to control the amount, the nature, and the management of the work to be done and the manner of doing it. ![]() The distinction to be made is whether a contract between the individual and the University is a contract for service or a contract of service. ![]() This test deals with the ability of the company or institution to control the actions of the individual. ![]() There are a number of considerations when evaluating whether an individual is an employee or an independent contractor for income tax purposes, and the courts over the years have developed key tests to assist in determining this. An independent contractor works independently to achieve a specified result. Normally an employee is subject to the direct supervision of theirĮmployer who controls the manner in which tasks are performed. The determination of whether an individual is an employee or independent contractor depends upon whether or not a "employer-employee" relationship exists between the payer and the payee. 19, 1986 provided by KMG Thorne Riddell, Chartered Accountants, for Camosun University. 1990 edition of CMA Magazine, and an opinion letter ofįeb. The following is compiled from an article by Robert Mot, CA, published in the Nov. Please find below guidelines used to determine whether an individual is an employee or an independent contractor.
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